4 hard truths about Obamacare

It was recently the Affordable Care Act’s third birthday, but you might have missed it for all of the (lack of) attention it received. Sure, there was the usual back and forth from the law’s supporters and opponents, but almost nothing that provided any new insights.

Supporters, such as the liberal New York Times editorial page, marked the ACA’s anniversary by touting the tens of millions already being helped by the law, from seniors on Medicare getting preventive services at no cost to them, to children with pre-existing conditions being able to get affordable coverage—the first steps on the road to expanding coverage next year to as many as 30 million uninsured persons (including 535,000 uninsured veterans according to a new study) while providing new benefits and consumer protections to everyone.

Opponents such as the conservative Heritage foundation, marked Obamacare’s anniversary by charging that it is causing higher premiums, putting more people out of work, leading to a loss of employer coverage, and making it more difficult for seniors to access Medicare-covered services.

Because the charges and counter charges were mostly a repeat of the same old tired talking points we have been hearing for three years, is it any wonder that much the public tuned the whole thing out?

Meanwhile, a new poll shows that the public remains ambivalent about the law and perhaps even more confused than ever. According to the Kaiser Family Foundation’s well-respected health tracking poll, “a majority of Americans are unsure how the law will impact them, and few are paying attention to the details of state‐level decisions about implementation. Though opinion on the law overall remains nearly evenly divided, opponents’ attacks seem to have taken a toll on the public’s expectations, and Americans are now more likely to think the law will make things worse rather than better for their own families. While most of the law’s individual provisions remain popular, many of the most well‐liked elements are the least well‐known among the public. Public knowledge of the ACA’s provisions has not increased since 2010, and awareness of some key provisions has declined somewhat since the law’s passage when media attention was at its height.”

As Mick Jagger sang, “it’s enough to make a grown man cry!”

But let’s put aside the political talking points for a moment, and instead look at some hard truths about Obamacare’s present and future:

1. The law already is helping many millions of people—that’s a fact, not a talking point. For the most part, the people being helped so far are mostly those who already had health insurance coverage (no-cost preventive services for seniors, rebates if your insurance company spends too much on profit and administration rather than patient care, elimination of life-time limits on coverage) while helping relatively small pockets of people who in the past had trouble getting coverage (e.g. children and some adults with pre-existing conditions, and young adults). The law also has increased Medicare and Medicaid payments to primary care physicians, provided scholarships and loan forgiveness for thousands of them and increased access to underserved communities through the National Health Services Corps. The Kaiser Family Foundation has an excellent three-year anniversary summary of who has benefited so far and the progress being made in preparing for the next steps. These gains are nothing to sneeze about, but they are just the opening acts to the huge changes that are supposed to take place in a little over nine months, when the ACA’s biggest coverage expansions and full gamut of health insurance regulations are scheduled to take place.

2. The next act—expanding coverage to up to 30 million uninsured persons and mandating minimum levels of health insurance benefits and new consumer protections for everyone– will be highly disruptive to the current system, and as a result some things will go right, some things will go wrong, some will pay more, some will pay less. But why should this surprise anyone?

Did anyone really think we could transition from the current system, where tens of millions are uninsured, where many millions more have inadequate insurance and consumer protections from insurance practices that put them at risk of losing coverage, to one where almost all legal residents will have access to guaranteed, subsidized minimum benefits that can’t be taken away when you get sick, without it being highly disruptive? Changing the status quo is supposed to be disruptive.

Did anyone think you can provide coverage to people who don’t have health insurance, especially those who are older and sicker, without some people (mainly the healthy young and wealthy of all ages) paying more through higher taxes and premiums? This is the way risk-sharing and pooling is supposed to work!

(About those premium increases for some people, by the way: keep in mind that this isn’t a case of premiums going up for the same old insurance you had before, it is premiums going up for new and improved insurance offered on the individual insurance market. An analogy: when the federal government required all new cars to have seat belts, air bags, and safer crash protection, these increased costs were passed on to consumers through higher prices, but most of us would agree it was worth it, because with these features, we are less likely to die or become hurt in car crash! The same is true for health insurance: the insurance we will buy next year will have standardized benefits and consumer protections that will help ensure that we all have better access to health coverage with the benefits we need to help keep us alive and well, so of course we may have to pay a bit more for it. But also keep in mind that under the ACA, the premium charged isn’t the same as what the insurance will actually cost you, because anyone with an income up to 400% of the federal poverty level–about $94,000 for a family of four–will be eligible for subsidies to help keep the cost down).

The social contract underlying all of this, of course, is that someday it will be me, someday it will be you, who will become older and sicker, and we all benefit from having a system that spreads risks and costs more equally over our lifetimes so that health insurance and healthcare are there for us when we need it most, at a price we can afford at that time.

3. The biggest practical challenge facing Obamacare is that the federal governmenthas too little control over what happens next. Yeah, I know it is a staple of conservative critiques of the law that it is a big (federal) government take-over of healthcare, but from the very beginning, the ACA was classic example of U.S. federalism—the federal government would provide most of the money and establish the ground rules, while the states would create the structures to implement most of it. So, as the law was written, the states were supposed to be the ones who would set up the marketplaces (exchanges) by which eligible persons would be able to buy a qualified and federally-subsidized health insurance coverage. The states were supposed to be the ones to expand Medicaid to the poor- and near- poor, paid for almost entirely by the federal government. (Originally, the Medicaid expansion was for all intents mandatory, because states could have lost their current Medicaid funds if they didn’t go along—but the Supreme Court decided in 2011 that punishing states for not going along was unconstitutional, making the Medicaid expansion a totally voluntary one for the states). Because Republican governors and legislatures in most states are continuing to resist Obamacare, both for political (ideological opposition and a desire to see it fail, see below) and practical reasons (uncertainty about how much it will cost them), most states have opted-out of setting up the health insurance exchanges and only half have agreed to the Medicaid expansion.

In the immediate future, the federal government may (on paper, at least) actually have some more control over the health insurance industry than originally anticipated by the ACA’s framers, because it will run the health insurance marketplaces (exchanges) for the dozens of states that opted-out. This raises another concern though: will the federal government really be able to carry it out, especially since Congress has not given the administration any additional money to help pay the increased costs it will incur for the federal exchange and the agency responsible for the program has lost billions of dollars in funding because of sequestration? The administration says it will be ready to operate an exchange in every state that has opted-out—but this is hardly a sure thing.

The key point though is that under the ACA, the federal government does not have the power turn a switch to make the program work the way it wants it to (like it can with Medicare); instead, it must rely on the states, including GOP-led states that in many cases are going to do everything they can to make sure it doesn’t succeed.

4. This brings me to the greatest political challenge facing the ACA, which is the unrelenting effort by GOP opponents to try to make sure it fails. It is no secret that Republicans will continue to try to limit funding for Obamacare’s implementation. They will push for votes to remove the tax revenue that the government needs to fund it. They will point to any problems that can be pinned on the law (e.g. higher premiums for some people, the confusion that will take place as new insurance options are rolled out next year) as evidence that the law isn’t working. They and their allies will continue to go to court to try to get it overturned. Most importantly, they will count on state resistance to the law (see #3 above) to make the law’s “failure” become a self-fulfilling reality. This, they hope, will lead to an “I told you so moment” and widespread public disaffection with Obamacare.

As the Washington Post’sEzra Klein notes, “ceaseless efforts Republicans have made to attack the law publicly, impede it procedurally and defund it legislatively. Implementation of a law of this size would always be difficult. But it will be far harder with Republican governors refusing to help and Republican legislators viewing each and every tough problem as an opportunity to chip away at the legislation.” But this will not result in repeal, he believes. “Obamacare can have a hard implementation in 2014, but President Obama isn’t going to repeal it or even lose reelection over it (though congressional Democrats might). And by 2015, it will be insuring tens of millions of people, the health-care industry will have adapted and many businesses and ordinary Americans will be using the exchanges. At that point, no one is going to repeal it.”

So to summarize, an honest assessment of Obamacare on its third anniversary would acknowledge that it already is helping tens of millions of people. It would also acknowledge that the next steps—expanding coverage to up to 30 million uninsured persons and providing better benefits and consumer protections to everyone —will be highly disruptive, but that this shouldn’t surprise anyone, it was supposed to be disruptive. It would acknowledge that some things will go right and some things will go wrong as a result. It would note that the states have a critically important role in making all of this work but acknowledge that many GOP-led states will be doing everything possible to make Obamacare fail. It would acknowledge the political reality is that congressional Republicans have no intention of calling a ceasefire in their efforts to make sure that Obamacare’s implementation does not go well, hoping that if the implementation is messy they can decisively turn public opinion against it.

It would also acknowledge that in the end, Obamacare is not likely to go away, and somehow or another, bumps and all, it likely will get us to a better place than today, a health care system where nearly all will have access to better and more affordable health insurance coverage. But getting from here to there isn’t necessarily going to be pretty.

Bob Doherty is Senior Vice President of Governmental Affairs and Public Policy, American College of Physicians and blogs at The ACP Advocate Blog.

4 hard truths about Obamacare 28 comments

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karen3

How about instead of shilling for “NEW AND IMPROVED INSURANCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!, which I suspect is really important to doctors in terms of revenue, why don’t you address some new and improved doctors who don’t have a 40% error rate on diagnosis and who don’t kill, on average, one patient every five years. And whose errors don’t jack up the cost of medical care for all of us.

ACA was a giant sell out to drug companies, health insurance companies, the AHA and the AMA to the detriment of patients. That is the reality of it. Those evil Republicans are working to make sure that you lobbyists don’t suck every last penny out of the economy with your unrelenting greed.

Harold

I question why the congress themselves have opted out of this wonderful ACA?

Isn’t this only another form of increased socialism, trying to equalize all aspects of life? Letting the government, given the tract record, take control of the best medical arena in the world can’t be good.

Reforms to the medical insurance industry are needed, that is a given. When firms like Kaiser cannot provide insurance premiums based on the whole of their members, limiting demographics state by state as mandated by law, that is wrong. Imagine if home insurance premiums were only balanced over state to state areas instead of spread nation wide, as they are now. Reforms are sorely needed, letting the government take control is not the answer.

M.K. Caloundra

If Obamacare is so awesome, how come its most ardent supporters (Congress, Unions) are scrabbling frantically for waivers?

Guest

“535,000 uninsured veterans”? Who are these hundreds of thousands of Veterans who are not already eligible for Tricare or VA healthcare?

karen3

They live next door to the millions of uninsured seniors, who have apparently never heard of Medicare. Speaks volumes about the American College of Physicians, doesn’t it.

EE Smith

…and all the uninsured children who COULD be covered under CHIP, but whose parents haven’t bothered filling out the paperwork.

So, obviously, yet another government program is the logical solution here.

PCPMD

Ok, can someone help me? I’m really trying here, but I just can’t understand your logic. The ACP is to blame for a small percentage of the senior populations’ lack of knowledge about medicare eligibility?

karen3

Mr. Doherty appears to have never heard of Medicare: “Did anyone think you can provide coverage to people who don’t have health insurance, especially those who are older and sicker, without some people (mainly the healthy young and wealthy of all ages) paying more through higher taxes and premiums? This is the way risk-sharing and pooling is supposed to work!” So, I guess now Obama is taking credit for Medicare. Maybe next we’ll hear how he walked on water and cured the lepers.

Guest

Obama will also take credit for the VA and Medicaid, when those already eligible are forced to sign up or face penalties.

http://www.facebook.com/brian.grimm.750 Brian Grimm

These are veterans, without a service-connected disability, who chose to leave the military prior to retirement; and reservists like myself, who have retired and must wait until they’re 60 (often 20 years) for medical benefits.

My understanding is that under some circumstances veterans now receive a year of coverage (Tricare, I belive) after discharge, but with the current economy that isn’t very long.

Anon

Every OEF/OIF/OND combat veteran who leaves before putting in their 20 is automatically eligible for five years of free healthcare through the Department of Veterans Affairs. “Veterans, including activated Reservists and members of the National Guard, are eligible if they served on active duty in a theater of combat operations after November 11, 1998, and have been discharged under other than dishonorable conditions.” [VA website, Returning Servicemembers (OEF/OIF/OND)]

Anon

As a postscript, a lot of peoples’ misconceptions about healthcare for vets might be coming from that very misleading story recently in a popular magazine, in which the DevGru member who claimed to have killed bin Laden also claimed that upon leaving the service he was left hanging with no access to government healthcare whatever. That claim, whether it came from the anonymous SEAL or from the article’s author, was false. It’s very unfortunate that such a mistruth was spread so widely throughout the MSM, because as one veterans’ advocate explains, “misinformation like this doesn’t help veterans. When one veteran hears in a high-profile story that another veteran was denied care, it makes him or her less likely to enroll in the VA system.”

The Robert Wood Johnson Foundation, where those figures come from, is a well-know left-liberal foundation. They were heavily involved in shilling for Hillarycare back in ’93 as well.

Ol’ Sarge

Those hundreds of thousands of veterans who are priority 5 or lower on the VA scale, that’s who. The VA today cares for those injured or disabled by combat action, per Congressional direction. If you didn’t see action, weren’t wounded/disabled (Purple Heart), or have a job, no VA health care for you.

According to the VA, I am in Group 8f.

FYI, here is the priority group listing, from the 2012 Vet Guide:

Group 1: Veterans with service-connected disabilities rated 50 percent or more and/or Veterans determined by VA to be unemployable due to service-connected conditions.
Group 2: Veterans with service-connected disabilities rated 30 or 40 percent.
Group 3:
Veterans who are former POWs.
Veterans awarded the Purple Heart Medal.
Veterans awarded the Medal of Honor.
Veterans whose discharge was for a disability incurred or
aggravated in the line of duty.
Veterans with VA service-connected disabilities rated 10% or
20%.
Veterans awarded special eligibility classification under Title 38, U.S.C., § 1151, “benefits for individuals disabled by treatment or vocational rehabilitation.”
Group 4:
Veterans receiving increased compensation or pension based
on their need for regular Aid and Attendance or by reason of being permanently Housebound.
Veterans determined by VA to be catastrophically disabled.
Group 5:
Nonservice-connected Veterans and non-compensable service connected Veterans rated 0%, whose annual income and/or net worth are not greater than the VA financial thresholds.
Veterans receiving VA Pension benefits.
Veterans eligible for Medicaid benefits.
Group 6:
Compensable 0% Service-connected Veterans.
Veterans exposed to ionizing radiation during atmospheric
testing or during the occupation of Hiroshima and Nagasaki.
Project 112/SHAD participants.
Veterans who served in the Republic of Vietnam between Jan. 9, 1962 and May 7, 1975.
Veterans who served in the Southwest Asia theater of operations from Aug. 2, 1990, through the present.
Veterans who served in a theater of combat operations after
Nov.11, 1998, as follows:
Veterans discharged from active duty on or after Jan. 28, 2003, for five years post discharge
Group 7:
Veterans with incomes below the geographic means test income thresholds and who agree to pay the applicable copayment.
Group 8:
Veterans with gross household incomes above the VA national
income threshold and the geographically-adjusted income threshold for their resident location and who agrees to pay copays
Veterans eligible for enrollment: Non-compensable 0% service connected and:
Subpriority a: Enrolled as of Jan. 16, 2003, and who have remained enrolled since that date and/ or placed in this subpriority due to changed eligibility status.
Subpriority b: Enrolled on or after June 15, 2009 whose income
exceeds the current VA National Income Thresholds or VA
National Geographic Income Thresholds by 10% or less
Veterans eligible for enrollment:
Nonservice-connected and
Subpriority c: Enrolled as Jan. 16, 2003, and who remained
enrolled since that date and/ or placed in this subpriority due to changed eligibility status
Subpriority d: Enrolled on or after June 15, 2009 whose income
exceeds the current VA National Income Thresholds or VA
National Geographic Income Thresholds by 10% or less

Veterans NOT eligible for enrollment: Veterans not meeting the
criteria above:

I remember posting $0.47 Medicaid checks …. And a week later they would mail me the statement … In a big yellow envelop with a 49 cents in postage. …. Insult to injury they paid electronically so I had to post them in quickbooks ….

YoungMD

This is a disaster that will collapse upon itself

another guest

But according to the author, it will all be the Republicans’ fault when it does. Especially the Republican State Governors, who dare to serve their citizens’ wishes rather than kow-towing to President Obama.

ninguem

Blame Bush. In fact, get it over with, and blame Emmanuel Goldstein.

C.L.J. Murphy

“This is the way risk-sharing and pooling is supposed to work!”

Not really.

Using that logic, car insurers would not be allowed to offer “good driver” discounts; someone who drives only a few thousand miles a year and has never had a ticket let alone an accident would be forced to pay higher premiums in order to completely subsidise their neighbour who drives 5 times as much and has had three at-fault accidents and two DUI convictions in the last five years to boot. It would be illegal to charge 40-year-old women, statistically very safe drivers, less than you would 18-year-old men, one of the highest-risk categories.

Risk-sharing and pooling in insurance has always traditionally utilised actuarial reckoning to asses meaningful premiums to individuals and sub-groups within the total pool of insured, based on many factors.

Under the Affordable Care Act, it will be illegal for insurers to assess meaningful premiums reflecting risk against such self-inflicted conditions as morbid obesity, abuse of alcohol and other drugs, sedentary lifestyle, and even, in those states which intend designating tobacco use an excluded “pre-existing condition”, smoking. This of course means that premiums must rise sharply for those who are, to go back to my car insurance analogy, “careful drivers” of their own bodies and health.

Despite the many noble objectives of Obamacare, I can’t see this ending well.

http://www.facebook.com/robert.luedecke Robert Luedecke

Very well-balanced article. My complements to the author!

another guest

That’s right, all good things that come out of Obamacare are due solely to Obama’s greatness, all of its failings are due solely to Republicans’ intransigence. Very balanced indeed.

The author singles out the Heritage Foundation as a conservative foundation (which it is). Why doesn’t he equally inform his readers that the Robert Wood Johnson Foundation, where many of his pro-Obamacare figures come from, is as left-liberal as Heritage is right-conservative?

Dana K.

“Obamacare can have a hard implementation in 2014, but President Obama isn’t going to repeal it or even lose reelection over it”

“Lose reelection”? Look, we all know Obama is no great fan of the Constitution, but do you numpties really believe he’s going to repeal the twenty-second amendment so he can go for a THIRD term?

What a ridiculously bubble-headed and slanted article this is. Just 35 percent of the public has a
favorable opinion of the law, according to
the most recent Kaiser Health Tracking poll. You are giving the Republicans more credit than they’re due if you think that Obamacare’s wild unpopularity is solely their doing.

http://twitter.com/chughesbabb chughesbabb

Thank you for this post. It is true, no massive change can happen without unrest (and a whole lot of vociferous public dissent). Please continue educate your readers. Despite the anger you see in the comments section, many of us are eager to learn; many understand we are in the midst of a significant change that will make the quality of life better for us, our families and our fellows. But as you point out, significant change never comes without a bit of chaos. Press on, please.

Guest

“many of us are eager to learn; many understand we are in the midst of a significant change that will make the quality of life better for us, our families and our fellows.”

All except Congress, who inflicted the bloody mess on us in the first place, and who are now desperately seeking a way to EXEMPT themselves, their families and their fellows from it.

“significant change never comes without a bit of chaos.”

It was the New York Times’ resident Useful Idiot, enthusiastic Stalin apologist Walter Duranty, who used to love to repeat, when Stalin’s atrocities were brought to light, “you can’t make an omelet without breaking a few eggs.”

You lot are in good company.

Mengles

Yes, and now we are seeing ramifications of the law: employers dropping their number of employees so as to not pay health insurance, and premiums skyrocketing even higher due to the law even with the exchanges. Remember the whole point of the law was to make insurance affordable.